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Hedging

Classic 10x While HEDGED''Oh Professor, I am a directional trader, I don't make money when I blend my positions. Hedging doesn't work for me'' Well, once again, I can assure you that hedging does work. Many charts and many tokens, some will rise and some will fall. In a market that changes direction in seconds you probably want to reconsider.. My message to my Turkish brother, while having some coffee. Also my message to you too. One Love, The FXPROFESSOR Ps. i have bad weeks and i have good weeks, i have bad days and months and good days and months but at the end of the day i enjoy trading without stress. Get rid of people and things that stress you out, trade as a GAME first and with money you can play with and use your real buying power to selct good SPOT and accumulate between now and 2024-2025. Just my humble opinion, you are on Tradingview where we supposed to all be logical, grown ups. You look, you listen or you post and you always decide what YOU will do with YOUR money. ATOM IDEA GOES AS NEUTRAL SINCE IT'S CLOSE TO TAKE PROFIT LEVEL AT 17,34$
A
by FX_Professor
3
The hedged grid trading system experiment The hedged grid trading system uses the principle that one should be able to cash in at a gain no matter which way the market moves. No stops are therefore required at all. The only way this is logically possible is that one would have a buy and sell active at the same time. Most traders will say that that is trading suicide but let's take some to look at this more closely. Let's say that a trader enters the market with a buy and sell active when a currency is at a level of say 100. The price then moves to 200. The buy will then be positive by 100 and the sell will be negative by 100. At this point we start breaking trading rules. We cash in our positive buy and the gain of 100 goes to our account. The sell is now carrying a loss of -100. The grid system requires one to make sure that cash in on any movement in the market. To do this one would again enter into a buy and a sell transaction. Now, for convenience, let's assume that the price moves back to level 100. The second sell has now gone positive by 100 and the second buy is carrying a loss of -100. According to the rules one would cash the sell in and another 100 will be added to your account. That brings the total cashed in at this point to 200. Now the first sell that remained active has moved from level 200 where it was -100 to level 100 where it is now breaking even. The 4 transactions added together now magically show a gain:- 1st buy cashed in +100, 2nd sell cashed in +100, 1st sell now breaking even and the 2nd buy is -100. This gives an overall a gain of 100 in total. We can liquidate all the transactions and have some tea.
NASDAQ:AEHREducation
by zrrsys
INVEST NOW AND TAKE PROFIT BY NOVEMBERTHIS IS NOT AN INVESTMENT ADVICE The hedged grid trading system uses the principle that one should be able to cash in at a gain no matter which way the market moves. No stops are therefore required at all. The only way this is logically possible is that one would have a buy and sell active at the same time. Most traders will say that that is trading suicide but let's take some to look at this more closely. Let's say that a trader enters the market with a buy and sell active when a currency is at a level of say 100. The price then moves to 200. The buy will then be positive by 100 and the sell will be negative by 100. At this point we start breaking trading rules. We cash in our positive buy and the gain of 100 goes to our account. The sell is now carrying a loss of -100. The grid system requires one to make sure that cash in on any movement in the market. To do this one would again enter into a buy and a sell transaction. Now, for convenience, let's assume that the price moves back to level 100. The second sell has now gone positive by 100 and the second buy is carrying a loss of -100. According to the rules one would cash the sell in and another 100 will be added to your account. That brings the total cashed in at this point to 200. Now the first sell that remained active has moved from level 200 where it was -100 to level 100 where it is now breaking even. The 4 transactions added together now magically show a gain:- 1st buy cashed in +100, 2nd sell cashed in +100, 1st sell now breaking even and the 2nd buy is -100. This gives an overall a gain of 100 in total. We can liquidate all the transactions and have some tea.
NASDAQ:AAPL
by zrrsys
The hedged grid trading systemThe hedged grid trading system uses the principle that one should be able to cash in at a gain no matter which way the market moves. No stops are therefore required at all. The only way this is logically possible is that one would have a buy and sell active at the same time. Most traders will say that that is trading suicide but let's take some to look at this more closely. Let's say that a trader enters the market with a buy and sell active when a currency is at a level of say 100. The price then moves to 200. The buy will then be positive by 100 and the sell will be negative by 100. At this point we start breaking trading rules. We cash in our positive buy and the gain of 100 goes to our account. The sell is now carrying a loss of -100. The grid system requires one to make sure that cash in on any movement in the market. To do this one would again enter into a buy and a sell transaction. Now, for convenience, let's assume that the price moves back to level 100. The second sell has now gone positive by 100 and the second buy is carrying a loss of -100. According to the rules one would cash the sell in and another 100 will be added to your account. That brings the total cashed in at this point to 200. Now the first sell that remained active has moved from level 200 where it was -100 to level 100 where it is now breaking even. The 4 transactions added together now magically show a gain:- 1st buy cashed in +100, 2nd sell cashed in +100, 1st sell now breaking even and the 2nd buy is -100. This gives an overall a gain of 100 in total. We can liquidate all the transactions and have some tea.
NASDAQ:TSLAEducation
by zrrsys
The hedged grid trading systemThe hedged grid trading system uses the principle that one should be able to cash in at a gain no matter which way the market moves. No stops are therefore required at all. The only way this is logically possible is that one would have a buy and sell active at the same time. Most traders will say that that is trading suicide but let's take some to look at this more closely. Let's say that a trader enters the market with a buy and sell active when a currency is at a level of say 100. The price then moves to 200. The buy will then be positive by 100 and the sell will be negative by 100. At this point we start breaking trading rules. We cash in our positive buy and the gain of 100 goes to our account. The sell is now carrying a loss of -100. The grid system requires one to make sure that cash in on any movement in the market. To do this one would again enter into a buy and a sell transaction. Now, for convenience, let's assume that the price moves back to level 100. The second sell has now gone positive by 100 and the second buy is carrying a loss of -100. According to the rules one would cash the sell in and another 100 will be added to your account. That brings the total cashed in at this point to 200. Now the first sell that remained active has moved from level 200 where it was -100 to level 100 where it is now breaking even. The 4 transactions added together now magically show a gain:- 1st buy cashed in +100, 2nd sell cashed in +100, 1st sell now breaking even and the 2nd buy is -100. This gives an overall a gain of 100 in total. We can liquidate all the transactions and have some tea.
S
by zrrsys
Bites Of Trading Knowledge For New TOP Traders #12 (short read)Bites Of Trading Knowledge For New TOP Traders #12 ---------------------------------------------------------------- What is Hedging? - Hedging is the action taken through the use of a financial instrument to minimize the loss or risk of the loss of value of an asset due to adverse asset price movements. Who are Hedgers? - Hedgers are market participants such as commodity producers who want to lock in selling prices of commodities they produce, or food manufacturers who want to lock in buying prices of raw materials purchased. Market participants also include financial institutions handling financial assets and use derivative products such as futures to manage the risk of a portfolio of financial assets. What is the difference between Physically Delivered vs Cash Settled Futures Contracts? - Physical delivery is a term in a futures contract which requires the actual underlying asset to be “physically delivered” upon the specified delivery date, rather than being traded out with an offsetting contract. Cash settled futures on the other hand allows for the net cash amount to be paid or received on the settlement date of the futures contract. Futures exchanges may offer both types of contracts to market participants who have different purposes for trading futures contracts. RISKS AND OPPORTUNITIES FOR CORPORATES AND INDIVIDUAL INVESTORS - Common application of financial market instruments for managing risk and opportunities. Diversification: Correlation in Futures Investors could allocate a portion of their portfolio to establish a managed futures position to deliver non-correlated results under most market conditions, which may serve as a risk mediator within an overall portfolio. This may deliver lower relative returns during periods of price stability. However, during periods of market stress, managed futures could outperform the broad market. For example, the Asia Tech 30 index which has no Thai companies as a component stock would not be expected to have any Thai Baht (USDTHB) currency exposure and which could be included in a managed futures portfolio at times where there is no or low correlation between the two markets and could be used as a hedge during times of negative correlation. Diversification: Portfolio Focused on Asset Returns Individual investors who have a portfolio of foreign stocks will have a return that is composed of the return of the foreign currency-denominated stock plus the change in currency exchange rates. Therefore, investing abroad means having exposure to two different sources of risk and return made up of the underlying asset and the exchange rate. For a long-term investor, the focus on return-generating assets may be the priority rather than returns from currency exchange rates. This could imply removing currency risk through a clearly defined hedging strategy process initially and then adding back currency exposure at a later stage if it is determined that currency exposures could improve a portfolio’s return. Investors would need to analyze their expected returns with and without currency exposures and determine their net currency exposure that they would like to remove. U.S. Dollar based portfolios could use futures contracts such as the Mini US Dollar Index ® Futures to hedge a basket of foreign stocks denominated in their respective domestic currencies. TRADDICTIV · Research Team -------- Disclaimer: We do not provide investment advice, nor provide any personalized investment recommendations and/or advice in making a decision to trade. Before you start trading, please make sure you have considered your entire financial situation, including financial commitments and you understand that trading is highly speculative and that you could sustain significant losses.
ICESG:SDX1!Education
by traddictiv
$SPX500: Top of relief rally?I'm short here, hedging my long book. Got a few long term positions that should do well regardless of whether this is part of a larger relief rally in a bear market, or a new leg up with new highs coming...but also have some growth positions I bot to capture the oversold names turning up that I need to manage risk for. I will be closing the ones that fail, but this signal helps control risk as individual charts pan out. Daily $SPX500 trend expires today, might see some rotation from stocks to bonds, as the quarter ends. Interesting at least, recession risk is substantial and bonds might react as well. Weekly charts for bonds show targets have been hit, so a rebound could occur. Stay safe out there, I'm short 230% vs my stocks portfolio, since some names I hold have higher beta, and I have some leverage going as well. (long term positions are low beta, but got high beta names long still) Cheers, Ivan Labrie.
FX:SPX500Short
by IvanLabrie
Bites Of Trading Knowledge For New TOP Traders #9 (short read)Bites Of Trading Knowledge For New TOP Traders #9 --------------------------------------------------------------- What is Hedging? - Hedging is the action taken through the use of a financial instrument to minimize the loss or risk of the loss of value of an asset due to adverse asset price movements. Who are Hedgers? - Hedgers are market participants such as commodity producers who want to lock in selling prices of commodities they produce, or food manufacturers who want to lock in buying prices of raw materials purchased. Market participants also include financial institutions handling financial assets and use derivative products such as futures to manage the risk of a portfolio of financial assets. What is the difference between Physically Delivered vs Cash Settled Futures Contracts? - Physical delivery is a term in a futures contract which requires the actual underlying asset to be “physically delivered” upon the specified delivery date, rather than being traded out with an offsetting contract. Cash settled futures on the other hand allows for the net cash amount to be paid or received on the settlement date of the futures contract. Futures exchanges may offer both types of contracts to market participants who have different purposes for trading futures contracts. RISKS AND OPPORTUNITIES FOR CORPORATES AND INDIVIDUAL INVESTORS - Common application of financial market instruments for managing risk and opportunities. Risk management is the responsibility of market participants designed to limit risk exposures that specifically applies to the participants financial profile in the market. The financial profile of a participant may include their role in the financial market or the amount of capital under their responsibility to be managed in the market, and therefore the risk variables that each would need to identify may be unique. For both corporate and individual investors, the market to trade would be a key variable to clearly state and support with reasons for trading or investing. Reasons for selecting one market over another could include price volatility, liquidity, daily volume traded, size of the minimum price increment, and value of the minimum price increment. Comparing these variables between markets will help decide the suitability and/or risk of each. For example, if Mini-Brent Crude Oil futures (BM) moves around $2.00 per day (or 2 points) and a point is worth $100, a trader might experience a $200 fluctuation in their account balance for one day. Another example is the U.S Dollar / Singapore Dollar (USDSGD), which could move 70 pips or more per day and trading a standard lot size with each pip worth $10, a $700 fluctuation could be expected for one day. Market participants may also manage their risk through the size of their positions. The larger their position size, the greater is their exposure and the smaller their position size their exposure is lower. Investors should determine the risk that would result from various position sizes and select the size that ensures that their risk limit is not exceeded. Finally, setting stops with a specified loss amount provides protection if the market does not move in the desired direction. It helps to prevent creating a loss scenario which is larger than an account can handle. TRADDICTIV · Research Team -------- Disclaimer: We do not provide investment advice, nor provide any personalized investment recommendations and/or advice in making a decision to trade. Before you start trading, please make sure you have considered your entire financial situation, including financial commitments and you understand that trading is highly speculative and that you could sustain significant losses.
ICESG:SDX1!Education
by traddictiv
Cup & Handle on GOLD MONTHLY Chart!!!!This is a bananas setup for MCX:GOLD1! ... Technical Argument Break of the neckline - monthly close above $2,020 per Oz ( or 2022 to be exact ;) ) could see a $1,000 gain in 12 months. **This is about 65% of the TA target of the Cup & Handle pattern. Even @LuxAlgo ECHO LUX indicator showing a projection to $2,500 per Oz ( 12 - 24 Months ) Fundamental Argument Gold is traditionally a safe haven asset. Risk Assets are under pressure as inflation numbers are blown out from sanctions in Russia. Governments find themselves in a tight spot as budget deficits are at all time high from QE after Covid lockdowns. Perfect storm for an economic reason with massive inflation. Gold is an Inflation Hedge!!!! This could be a brilliant portfolio hedging position for a year or even longer. I'll be looking at taking a spot position due to the long time frame and might supplement the breakout with a small XAU CFD for a short term scalp (2 months Max) Position Details: Entry: $ 2,020 1st Take Profit: $ 2,500 2nd Take Profit: $ 3,000 -----> WOW Term: 12 - 24 Months Bang! @theRaggy
SAXO:XAUUSDLong
by theRaggy
How Inflation Affects Our Savings & Our LivesFor the past few months, we’ve heard a lot in the news about increasing living costs. The cost of our essential goods and services – from our food to our electricity bills, housing, and electronics – is constantly rising. And our salary increases (if any) aren’t enough to cover the increasing cost of our basic expenses. I wanted to write this article for several reasons. I’m not trying to paint a gloomy picture, but rather to help people better understand the situation and how increasing prices affect our lives. So, as trivial as it may sound, let’s start with the basics and the basic definition of inflation. What Is Inflation? Inflation is the decline of the purchasing power of a currency over time measured amongst a pre-selected basket of goods. Now, here’s where it gets more interesting. The root cause of inflation is an increase in the supply of money in an economy. Our local monetary authorities (Central Banks and Governments) can increase the money supply, either by printing and giving away more money to individuals, by legally devaluing the currency, or by loaning new money into existence and purchasing government bonds from banks on the secondary market. In all such cases, the supply of money increases. Thus, your living expenses increase, your purchasing power decreases, and you get less for your money. There are some exceptions to this – but we will get into that a bit later when we look at possible solutions to this phenomenon. So, now, let’s review what we’ve seen for the past year, how inflation has affected our lives, and what our governments and central banks have done about it. What Are Governments Doing? Europe – The EU member countries agreed on a Pandemic Emergency Program. It’s designed to support the economies of member countries, and it’s worth 1.8 trillion euros. That’s a little over 2 trillion dollars. America – The US has several programs designed to help its economy. The first was a 3 trillion dollar program designed to help the US overcome the difficulties of the COVID19 pandemic. There are also several other programs going to the Senate for approval, all of which will further fuel the current inflationary cycle. What Level Of Inflation Are We Currently Experiencing? Well, this is a great question. It’s also a bit tough to answer. You might think that the easiest way to measure price increases is by comparing prices at the grocery store, at the petrol station, or with your landlords. And that makes sense. But you might not all see the same level of inflation from one item to the next. This is because the official inflation figures are calculated slightly differently, and they’re based on a so-called basket of goods. In the US, this “basket of goods” is managed by the Central Statistical Office. They decide what items to include in the basket and how often to change them. So, when the US inflation was calculated at 7.00% last week (the highest recorded rate in the last four decades), this was based on that specific basket of goods. That said, we’re seeing sharp increases in the official inflation data in many countries – with the UK hitting 5.40%, 5.70% for Germany, and 36% for Turkey. This means, regardless of each country’s chosen ‘baskets’, consumers worldwide are experiencing sharp measurable price increases. The more we get into the new year, the more we find ourselves asking when this vicious cycle will end. Experts are yet to agree on what kind of inflation we’ll see in the months ahead. However, the one thing that they all seem to agree on is that inflation is here to stay for the next two to five years. What Can We Do To Protect Our Savings And Plan For A Better Financial Future? There are a few options that you can consider. For those of you who prefer to take a more traditional approach towards money, well, these options might not be for you. But let’s explore all the options available to you, regardless of your age: 1 – Savings accounts If this has worked for you previously, I’m sorry to tell you that it might not work this time. Unfortunately, putting your money in a savings account is unlikely to be your best option when it comes to protecting your savings and your hard-earned money. This is because of the meagre interest rates on offer. When measured against the official inflation figures, with a 1% interest rate, you are still likely to be losing at least 4% – 5% of your actual purchasing power. While the official inflation figures might be around 7%, the level of inflation for your specific purchases could be as high as 12% to 15%. For simplicity of calculation, let’s look at an example. Say you had 100,000 USD or EUR in a savings account with your favourite bank, you would be making a whopping 1,000 USD or EUR in interest in a year (that’s assuming you are lucky enough to get a 1% interest rate from your bank). With inflation ranging between 12% to 15%, this means that you will be down between 11% to 14%. That’s a loss of about 11,000 to 14,000 USD or EUR per year. You won’t see that reflected in your bank account as numbers, but you will feel it when you go out to purchase goods. And let’s not forget that we are entering the 2nd year of high inflation – and that means twice the potential loss in buying power. 2 – Real estate In my country, we have a saying that if a person doesn’t know what to do with their money, they put it into real estate. It might still be a good choice; it depends on how you look at money. But with real estate returning between 7% -8% gross per year and with rising maintenance costs, it still might not make up for the 12%-15% increase in inflation. You might help to make a complete evaluation – one that factors in increasing prices and that factors in the size of your investment. If there is further inflation, or if you find yourself in sudden need of money, you may find yourself selling at a less than ideal price. Again, this doesn’t mean that real estate isn’t a good investment; it can be, based on your financial goals and investment horizon. Another thing to consider when evaluating your investment options is your purchasing power. It might help to compare the purchasing power of your investment now with the possible increase in the price of the property in the future. It might also help to keep in mind that if inflation goes up by 20% over three years, for example, then your property will need to go up by more than 20% in value for you to benefit from the investment. 3 – Bonds The FED is on track to raise interest rates in 2022. So, could government bonds be the way forward? 10Y US Treasuries are often considered the benchmark for a risk-free investment. That said, they don’t usually bring high returns. Let’s assume that, in a best-case scenario, you get the kind of high annual return we saw at the beginning of the century (5%-6%). Unfortunately, it still wouldn’t be enough to beat inflation and increase your overall purchasing power. 4 – Precious Metals Precious metals, in particular gold, have always been considered a great way to protect against inflation. One thing to consider: the financial markets haven’t been reacting very well recently to the idea of the Federal Reserve keeping a hawkish mood for the next year to come. In recent years, we have noticed how the inverse correlation between the stock market and gold has partially vanished during “cold” periods of general selloff. To avoid getting liquidated on their positions on stocks, big players would rather start selling massively their positions on assets where they have gained substantial profits, as it could be on gold. The result: massive drops also on the precious metal. This means that the old-fashioned hedge against inflation might have severe volatility in price during a bear market. 5 – Cryptocurrencies Cryptocurrencies are considered the new store of value. They have recently been compared to precious metals and sometimes been referred to as digital gold, especially when we talk about the king of cryptos – Bitcoin. Bitcoin has proven to be a great store of value, providing stellar performances in the past years, closing 2021 with +57%. Investors who have been able to jump on crypto projects at early stages have been able to get stellar returns in the sphere of 3 to 4 digits percentage. The only tiny issue with cryptos is that they require a cold-blooded investor, being able to “hodl” during periods like the current one, where they have been losing across the board more than 50% of the picks. It’s an investment that requires a very high appetite for risk. Be sure to take a look at our blog for more content. And don’t miss out on our free webinars. Next up: “How to protect your crypto investment against adverse market movements”.
ECONOMICS:USCCPIEducation
by Atlas-Horizon
A VIX signal is imminent.We are on the verge of a MACD sell signal on the VIX , after the VIX crossed the 30 mark. A sell signal occurs when the histogram crosses below the zero line or when the MACD curves cross from top to bottom. According to the logic from my book "Hedging mit Optionen: Crashsicher handeln", this constellation signals a calming of the market situation. With the exception of 2008, the triggering of this signal was a good time to reduce hedging positions and dare to re-enter the markets.
TVC:VIXLong
by Tradehelden_EricLudwig
The Monkey and the Wise OwlOne night, the monkey was monkeying as usual, jumping up and down, left and right, holding his fingers straight out of his head as if they were horns of a fearless bull. The Owl watched carefully, one eye skeptical, the other sarcastic. "What do you think you are doing?" said the wise owl. "I am hedging with BTC against a market crash," said the monkey, who didn't need an adjective to have his character described. "You are doing what?!" said the wise owl with half a chuckle, while still holding to its skeptical/sarcastic look. "Look deeper into my eyes and you shall see." "Shall see what?" asked the monkey monkey eagerly. "You shall see experience, you fool," replied the wise owl, "If you hedge volatility with more risk, especially if the correlation coefficient is almost 1 more than 80% of the time, and, even more, when the coefficient was low, it was because BTC was falling while the market didn't, then you must be insane." "The past doesn't necessarily predict the future," echoed the monkey with one of those packaged sentences that he knows by heart. "I will give you that," said the wise owl. "But then, why do you expect BTC to go up?" "Because it always did in the past," replied the monkey confidently. "And even the market rises eventually after any crash," it felt the urge to add. "Indeed," replied the wise owl so calmly, that kind of calmness which signals the lack of interest in further conversation. They waved goodbye. Back to its precious solitude, the owl switched to is smartphone, navigated to the investment app, and opened a massive short position on the monkey's future, while using BTC as a hedge.
COINBASE:BTCUSDShort
by MontyMacht
Bites Of Trading Knowledge For New TOP Traders #7 (short read)Bites Of Trading Knowledge For New TOP Traders #7 --------------------------------------------------------------- What is Bitcoin and from where did it originate? – Bitcoin is a digital form of a medium of exchange with no central bank control which issues fiat currencies. Instead, the financial system involving bitcoin is managed by thousands of computers distributed around the world, a decentralised ledger, where anyone can participate by downloading open-source software and connecting to the ecosystem. The invention and implementation of bitcoin is credited to the person or persons known Satoshi Nakamoto in 2009. The white paper “Bitcoin: A Peer-to-Peer Electronic Cash System“ states that bitcoin was to be, “A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.” What is the Blockchain? – The Blockchain is a decentralised ledger that is append-only meaning that data can only be added to it. Once information is added, it is extremely difficult to modify or delete it. The Blockchain enforces this by including a pointer to the previous Block in every subsequent Block. The pointer is a Hash of the previous block. Hashing involves passing data through a one-way function to produce a unique Fingerprint of the input. If the input is modified even slightly, the Fingerprint will look completely different. Since the Blocks are linked in a Chain, there is no way for someone to edit an old entry without invalidating the Blocks that follow, allowing a secure structure. What is Mining? – Mining is the process in which transactions between users are verified and added to the decentralised ledger. The process of mining bitcoin is responsible for introducing new coins into the existing circulating supply and is one of the key elements that allows bitcoin to work within the peer-to-peer decentralized network, without the need for a third party central authority. What Is a Blockchain Consensus Algorithm? – A consensus algorithm is a mechanism that allows users or machines to coordinate the agreement of what is a valid block in the Blockchain in a distributed setting. It needs to ensure that all participants in the system can agree on a single source of truth. Types of consensus algorithms include Proof of Work (PoW) and Proof of Stake (PoS). What is Proof of Work? – Proof of Work (PoW) is a mechanism for preventing the same bitcoin funds from being spent more than once. Proof of Work consists of a consensus algorithm which is a protocol that sets out the conditions for what makes a block in the Blockchain valid. It ensures the security and integrity of bitcoin’s distributed ledger. RISKS AND OPPORTUNITIES FOR CORPORATES AND INDIVIDUAL INVESTORS – Diversification: Portfolio Focused on Pairs Trading Strategies – Many individual investors use a pairs trade as a trading strategy that involves matching a long position with a short position in two markets with a high correlation. In currency trading, the most economically and politically stable and liquid currencies are commonly the focus of market participants as the focus for currency pairs trading like these eight most traded currencies: U.S. dollar (USD), euro (EUR), Japanese yen (JPY), British pound (GBP), Australian dollar (AUD), Canadian dollar (CAD), Swiss franc (CHF), and Chinese Yuan (CNY). If an individual investor is pairing EUR with CHF as part of their pairs trading portfolio, they could use common technical indicators like moving averages as part of their analysis in forming a trade decision. For example, EURUSD on 4th May had crossed the moving average, but USDCHF had not shown similar price action, which could indicate the potential for follow through failure in the EURUSD to the downside. Contrast this with the 16th June where both EURUSD and USDCHF had both crossed the moving average and had clear follow through subsequently. Investors would need to analyze their expected returns with and without currency eThe investor could alternatively consider trading the Mini US Dollar Index ® Futures given that the analysis could point to an opportunity being in the U.S. Dollar, which had been removed as a factor in this pairing. TRADDICTIV · Research Team -------- Disclaimer: We do not provide investment advice, nor provide any personalized investment recommendations and/or advice in making a decision to trade. Before you start trading, please make sure you have considered your entire financial situation, including financial commitments and you understand that trading is highly speculative and that you could sustain significant losses.
ICESG:SDX1!Education
by traddictiv
Bites Of Trading Knowledge For New TOP Traders #6 (short read)Bites Of Trading Knowledge For New TOP Traders #6 --------------------------------------------------------------- What is Hedging? – Hedging is the action taken through the use of a financial instrument to minimize the loss or risk of the loss of value of an asset due to adverse asset price movements. Who are Hedgers? – Hedgers are market participants such as commodity producers who want to lock in selling prices of commodities they produce, or food manufacturers who want to lock in buying prices of raw materials purchased. Market participants also include financial institutions handling financial assets and use derivative products such as futures to manage the risk of a portfolio of financial assets. What is the difference between Physically Delivered vs Cash Settled Futures Contracts? – Physical delivery is a term in a futures contract which requires the actual underlying asset to be “physically delivered” upon the specified delivery date, rather than being traded out with an offsetting contract. Cash settled futures on the other hand allows for the net cash amount to be paid or received on the settlement date of the futures contract. Futures exchanges may offer both types of contracts to market participants who have different purposes for trading futures contracts. RISKS AND OPPORTUNITIES FOR CORPORATES AND INDIVIDUAL INVESTORS – Diversification: Correlation in Futures – Investors could allocate a portion of their portfolio to establish a managed futures position to deliver non-correlated results under most market conditions, which may serve as a risk mediator within an overall portfolio. This may deliver lower relative returns during periods of price stability. However, during periods of market stress, managed futures could outperform the broad market. For example, the Asia Tech 30 index which has no Thai companies as a component stock would not be expected to have any Thai Baht (USDTHB) currency exposure and which could be included in a managed futures portfolio at times where there is no or low correlation between the two markets and could be used as a hedge during times of negative correlation. Source: ICE Connect Diversification: Portfolio Focused on Asset Returns – Individual investors who have a portfolio of foreign stocks will have a return that is composed of the return of the foreign currency-denominated stock plus the change in currency exchange rates. Therefore, investing abroad means having exposure to two different sources of risk and return made up of the underlying asset and the exchange rate. For a long-term investor, the focus on return-generating assets may be the priority rather than returns from currency exchange rates. This could imply removing currency risk through a clearly defined hedging strategy process initially, and then adding back currency exposure at a later stage if it is determined that currency exposures could improve a portfolio’s return. Investors would need to analyze their expected returns with and without currency exposures and determine their net currency exposure to be removed. U.S. Dollar based portfolios could use futures contracts such as the Mini US Dollar Index ® Futures to hedge a basket of foreign stocks denominated in their respective domestic currencies. TRADDICTIV · Research Team -------- Disclaimer: We do not provide investment advice, nor provide any personalized investment recommendations and/or advice in making a decision to trade. Before you start trading, please make sure you have considered your entire financial situation, including financial commitments and you understand that trading is highly speculative and that you could sustain significant losses.
ICESG:SDX1!Education
by traddictiv
Cycle Low in Silver, Gold? Inflation Hedges Take Off NYSE:AG MCX:SILVER1! AMEX:GDX TVC:GOLD It takes zooming out at least 20 years to feel good about buying gold or silver, traditional inflation hedges. It's been a boring asset class since the Federal Reserve began its most recent monetary experiment, but as we all know, the piper will get paid. Regardless - silver (shown) and gold are hinting at cycle price lows. After breaching a year-long trendline and triggering selling pressure, silver prices held support over the previous major low before forming what now may be a H&S Bottom, as defined by Edwards & Magee (1951).
NYSE:AGLong
by jBTCkingaling
Considering a Boeing short as a hedgeBoeing has had five straight quarters of negative-- and steadily worsening-- free cash flow per share. Current FCF per share over the last 12 months: -$34.15. Book value is also negative at $-31.04 per share. Frankly, you're buying liabilities when you buy this stock. Boeing's share price has risen despite one disaster after another. The latest is that a bunch of 737 MAX jets have been grounded due to electrical issues. Yet despite the company's catastrophic fundamentals, Boeing's P/S multiple is trading very near its all-time high of 2.48 from 2018. At that time, the company was buying back shares and paying a dividend. It has since suspended both activities. Government aid to the tune of $60 billion gave Boeing some breathing room, so it ended last year with a $20 billion cash pile. However, it can't keep up this level of cash burn indefinitely. Macroaxis calculates a 38% chance of financial distress for Boeing in the next 12 months. Boeing has rock-bottom analyst scores, with a 0.2/10 Thompson Reuters Equity Summary Score and 18/100 from S&P Global. Open interest from options traders has been highly bullish due to geopolitical tensions and the return of air travel. But this company is its own worst enemy: poorly managed and living on the dole. I'd consider a Boeing short as a potential hedging strategy for a Lockheed-Martin long. Despite the market meltup, I think this market is more fragile than it appears. So I've begun looking at hedging strategies. And for me, from a fundamental point of view, Boeing is one of the worst companies I'm aware of and a conviction short.
NYSE:BAShort
by ChristopherCarrollSmith
7
Update to ABNB Trade Setup: Weekly CollarUpdate to ABNB Trade Setup: This trade popped nicely today after several days of consolidation. I am expecting a small pullback sometime this week and so set up the following weekly collar: 10 SEP 21 $170/$157.50 for $0.35 credit: Sold to Open the 10 SEP 21 $170 Call Bought to Open the 10 SEP 21 $157.50 Put Next week if the trade closes between that collar I will bump it up again. If it closes below the put strike I lock in a small win and if it closes above the call strike I lock in 1.69 R (1.69 x my initial risk). For details on the original trade setup:
NASDAQ:ABNBLong
by Dustin_D_RLT